By Staff reporters
Angry former Chicecream employees have taken to social media with the cheery slogan “Chicecream owes our wages!”
According to one account, during one period of layoffs, six employees signed resignation agreements and compensation contracts with a scheduled payout date of October 15. The day arrived and no money was received.
Frozen in time
An internal memo describes Chicecream’s finances as “dire” with no chance that salary or compensation will be paid any time soon. Meanwhile, the flunking freezer continues to work toward a solution.
Chicecream told Jiemian News on October 20 that the company was running smoothly and disputes were being dealt with.
Prior to the salary dispute being exposed, trouble was already obvious with social media updates ending in the middle of August.
Founded in Shanghai in 2018, Chicream immediately appointed itself as China’s premier ice cream newcomer and began second-guessing the finicky middle-class consumer. High-priced aspirational deserts were to be the next big thing.
The rise of e-commerce platforms meant that within four years, the fancy ice cream had become the fifth largest ice cream company in China.
More leave than take
With Chicecream products having vanished from all relevant e-commerce channels except the company’s own little online store, the situation is less than ideal. But it’s worse offline.
This summer saw intense price competition in the ice cream market. Among the highest-priced, Chicecream had the furthest to fall and is still falling. Popular items that used to sell for around 20 yuan have dropped to as low as 5 yuan, but it hasn’t helped sales.
This year, Chicecream products have been out of stock in many locations, and many retail channels stopped stocking Chicecream products in 2022.
Ice cream is cool
In line with the trend of consumer upgrading in China and the growing purchasing power of the middle class, Chicecream filled the gap in the premium ice cream market with a selling point of zero additives and quality ingredients.
The rise of e-commerce platforms and the explosion of social media allowed the brand to break into the market. Within four years, Chicecream had become the fifth largest company in China’s ice cream sector.
Chicecream received angel investments in July 2018, followed by a pre-A round in August, and secured a 200 million yuan Series A funding in early 2021.
On the 2018 “Singles Day” shopping festival, Chicecream shipped 20,000 66-yuan popsicles. In 2019, sales exceeded 100 million yuan. In 2020, they sold 48 million ice creams.
Unjustified expansion
But it’s a very different marketplace today. In 2022, Chicecream was regularly mocked online for its high prices. Then the milky-white purity of the product came under question when accusations of additives arose and sales ditched.
As economic cycles change, consumer whims cycle alongside. Today, exorbitant sorbet is nothing more than that, high-priced ice.
In 2022, iiMedia data showed that more than 70 percent of Chinese consumers were unwilling to accept ice cream priced above 10 yuan (excluding 10 yuan). Since then, packaged ice cream prices have dropped by 43 percent. And Chicecream hasn’t received funding since 2021.
The workforce expanded faster than sustainable income and Chicecream has nothing to pay its bills with. Heads, big and small, have rolled with resultant public relations crises and marketing shift changes.
Unquestionably yummy
It’s unclear how significant the salary dispute is and whether Chicecream has the will or the way to resolve it. The question now is when the cash flow issue will infect the supply chain.
Bizarrely, even as former Chicecream employees demand unpaid wages, some still praise the ice cream.
“Even though we’ve not been paid, it’s really good ice cream, and the ingredients are of high quality,” one employee stated.
